An auditor would search for unrecorded liabilities by:
A) examining paid invoices for inclusion in the proper accounting period.
B) examining bank statements for outstanding checks written to vendors.
C) examining the cash disbursements journal for the period subsequent to year-end but prior to issuance of the financial statements for payments made but not properly recorded as a liability in the correct period.
D) All of the above.

Question

Quizplus · Accepted Answer

The auditor would search for unrecorded liabilities by examining the cash disbursements journal for the period subsequent to year-end but prior to issuance of the financial statements for payments made but not properly recorded as a liability in the correct period. While examining paid invoices for inclusion in the proper accounting period and examining bank statements for outstanding checks written to vendors may be part of the audit procedure, they do not specifically address the search for unrecorded liabilities.

An Auditor Would Search for Unrecorded Liabilities By